As power grid sputters in Puerto Rico, so does business
  • Tuesday, November 20, 2018
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As power grid sputters in Puerto Rico, so does business

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GUAYNABO, Puerto Rico >> Miriam Gonzalez stepped outside her shuttered restaurant in this municipality near San Juan and offered an exaggerated grin. “This is my happy face,” Gonzalez, 52, said, heavy with mockery. “It’s a very happy face. We all have it on.”

Every morning, Gonzalez puts on this happy face like a coat of makeup to ward off the depression that has festered since Hurricane Maria shut down her restaurant, trampled its well-tended garden and crushed her usually upbeat spirit.

Like much of the island, she has gone without electricity since the storm hit on Sept. 20, making do with glowing lanterns, a gas barbecue grill, daily trips to the grocery store and wide open windows to stay cool. The Puerto Rico Electric Power Authority’s grid is working at less than 50 percent, leaving much of the island in the dark. For Gonzalez and other residents, the catastrophe of Hurricane Maria has been followed by an economic disaster with no end in sight.

Manuel A. Laboy Rivera, the secretary of Puerto Rico’s Department of Economic Development and Commerce estimated the economic losses at a minimum of $20 billion, although some economists and analysts put it as high as $40 billion, much of it from the drop in productivity. Puerto Rico’s economy is already $70 billion in debt and will be hard hit by the steep drop in tax revenue.

“The lack of power is the root of everything,” Laboy Rivera said. “This is a very challenging time right now for Puerto Rico.”

Countless small businesses, like Gonzalez’s, remain closed because they do not have power or a working generator (there is an epidemic of broken generators). On an island driven by tourism, many hotels are not open for guests. Manufacturers have operated in fits and starts.

At the unemployment office in Bayamón, about a 20-minute drive from Gonzalez’s restaurant, hundreds line up every weekday morning to try to collect emergency unemployment benefits. More than 22,000 applied in October, compared with 6,800 in the same month last year, according to the Puerto Rico Department of Labor.

Others are simply leaving the island: As of Tuesday, 156,000 people have arrived in Fort Lauderdale, Miami and Orlando on planes from Puerto Rico since the storm. Many of them are professionals and middle-class workers who have fled the island because their jobs disappeared and they can no longer live without power. They are likely to stay on the mainland, a crushing blow to the island’s fragile tax base and its ability to generate jobs. Government officials estimate that as many as 300,000 on an island with 3.4 million people could eventually leave.

Chuck Watson, director of research and development at Enki Research, a disaster research and modeling company, said the lack of electricity had severely compounded Puerto Rico’s economic challenges. He called the government’s goal to restore power by mid-December “beyond wishful thinking.”

Without power, the economic losses will quickly multiply, Watson said.

“Once you uproot from Puerto Rico and come to the U.S. mainland, are you really going to want to go back, given the other issues like the Puerto Rican government and the unemployment, a number that will be catastrophic?” he said. “In New Orleans, there is a lot that left after Katrina and never came back.”

Tourism is among the hardest hit, Laboy Rivera said. About 30 percent remain closed, a number that has improved in the past two weeks. The loss in convention money is considerable, Laboy Rivera said. Most hotels that are open continue to house hurricane relief workers.

Manufacturing, which makes up 48 percent of the island’s economy and accounts for a third of the tax revenue, was bedeviled by the lack of power, structural damage, debris-strewn roads and, most recently, generator breakdowns. Many businesses, including pharmaceutical, biotechnology and medical-device companies, have struggled to reach their pre-hurricane production and shipping goals, although the situation is rapidly improving.

The Association of Restaurants in Puerto Rico said about 1,800 of its 5,000 member restaurants, including some belonging to major chains, have not yet reopened. Generator breakdowns often prompt restaurants to close abruptly and repair parts can take weeks to arrive. A large new generator can cost upward of $40,000. It remains unclear how many of the smaller restaurants will be able to reopen, said Ramon Leal, the group’s president.

“Some days we open 50 restaurants and close 50 restaurants,” Leal said. The bigger problem, he said, is “we are losing tons of people from the restaurant industry. They are moving to Miami, Orlando, Atlanta, New York.”

Just as worrisome as the exodus, said Laboy Rivera, is the blow to the island’s small and medium businesses, which provide 80 percent of the jobs. These include accounting companies, advertisers, hair salons, law offices, media, medical labs and retail stores. As many as 50,000 of these businesses had not reopened as of the beginning of the month, he estimated.

On Calle Esmeralda, a once-busy commercial strip, Gonzalez’s charming farm-to-table restaurant, Believe, had flourished before Maria, earning up to $4,000 a day. Now she makes a fraction of that cooking hamburgers and shish kebabs on a portable grill out front, where locals sip beer on plastic chairs.

Gonzalez had a small generator for a couple of days but it broke down. She has waited weeks for repair parts and worries that the package, like so many others, might get stolen. Even if it arrives, finding someone to fix the generator is almost impossible. So is buying a new one.

The low point, she said, was laying off her 15 employees.

“That killed me,” she said. “I would lie here,” she added, stretching out on a bench, “with quartz on my forehead, chest and stomach, asking for electricity. I went to church, and I’m not a church person. I sat there and said, ‘Please bring the power back.’” Gonzalez said she cried so much she “dried up.”

Not all suffer equally. Hurricanes reward some industries, like construction, which had been moribund here for a decade. But the real boom is in joblessness.

Leisha Otero drove from Morovis, a mountain town turned inside out by Hurricane Maria, to the unemployment line in Bayamón. Having lost her small house and her $10-an-hour job as a practical nurse at a medical lab in Vega Alta, she came for news on her application for lost wages. But there was no word, only instructions to wait for a letter of approval from the federal government.

“I’m a nurse, a stylist, a nail technician,” she said, as her two children scrolled through photos on her cellphone.

Otero’s epileptic 11-year-old son contracted a bacterial disease from rodents shortly after the storm. His fever spiked at 103, he couldn’t stop vomiting and his lips were gray. She rushed him to the hospital. He is fine now, but she worries that his epilepsy medicine will run out and that his doctors will leave for the mainland. Plus, without a job, she has no health insurance.

Her husband already left, to Boston, where he found work in a factory. Her brother, a nurse, and his wife left for North Carolina. Otero said she has no choice. After stopping at the unemployment office, she would head for the airport with her children to reserve flights to Boston.

“It hurts my heart, seeing this all destroyed, and I love it so much,” Otero said. “Who knows when the businesses will reopen? They were already struggling before the storm.”

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